Knowledge: What is it?
This, the first of this series of occasional papers on Managing Knowledge, looks at knowledge and its
characteristics. Future articles will address some of the issues that arise when we try to manage
knowledge, and the related topics of intellectual and social capital, learning, categorising, searching
and so on, and will finally suggest a path towards exploiting knowledge for profit.
Knowledge is increasingly touted as the replacement for land, labour and capital as
the source of competitive advantage. There’s a lot of horse manure, to put it
delicately, talked about knowledge management, and quite a bit of hype (as
measured by the number of conferences and magazines). This has resulted in an
unseemly scramble to what I’ll call “product redefinition”, to be kind to it, as
everyone rushes to rename everything from document management through
workflow to email systems as “Knowledge Management” systems.
So, if these aren’t knowledge management what is managing knowledge about
anyway, and what should you do about it?
The best answer is probably to hire a bunch of smart people and get them to talk to
one another. And despite the skills shortage that makes it difficult to hire smart
people, this last part is far and away the hardest.
But why do I prescribe this solution to
Well, the first reason is that managing
knowledge is not a technology issue. As a
rule of thumb, if you spend more than
about a third of your budget on technology
then you have a technology project.
And, a key thesis; knowledge implies a
knower. I shall qualify that statement later,
but I propose pro tem that we consider the
stuff that is stored in books and on
computer systems as information and that
in peoples’ heads as knowledge.
Knowing and knowledge have
implications. Consider the phrase “I read
• Exploiting Knowledge is
not a technology issue
• If you spend more than
about one third of your
budget on technology
then it’s a technology
• Knowledge implies a
knower; the rest is
what you wrote and I didn’t understand it”. You read the words; you understand the
information conveyed, but the insight - the importance, implications and potential
contained within the message is the stuff of knowledge.
These articles are not about technology, although technology is a key enabler of
managing knowledge. (I prefer not to use “knowledge management”; partly because
the KM currency has been devalued as described above but also because KM
implies that knowledge is a thing that you can manage like a document, rather than
something soft and contextual to which you need to apply some people
management skill and effort.)
Nor are we are talking rocket science here, although some anonymous scientist at
the Jet Propulsion Laboratory, quoted by Davenport and Prusak in their excellent
book ‘Working Knowledge’1 said that even rocket science isn’t that hard anymore!
Managing knowledge isn’t cheap. It’s not about throwing up a few web pages on a
cheapo server, or even about a lot of web pages on a lot of expensive tin. I’ll return
to the topic of price and value in the knowledge market in a later article, but consider
here that there has to be a good reason for doing what you are doing about
managing knowledge in the first place, especially because it is going to cost you a
lot to do it properly.
This article takes a brief look at the reasons for trying to manage knowledge and
has a stab at defining what it is (although two and a half thousand years of
epistemology hasn’t got us very far here so I’m not going to claim to know the
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Many companies are moving from being product to know-how companies. ICL is a
case in point; it doesn’t make product anymore (hardware or soft); it’s a services
company, selling what it knows and what it can do in the market.
Even for product companies (like Chaparral Steel, widely quoted in the business
books), knowledge is becoming an essential ingredient of success - at all levels in
the organisation. Line workers at Chapparal go to conferences and try experiments
to improve things. On a related point, I was delighted to read some time ago that
NEC had replaced the robots in its cell phone factory with humans because, with the
need to change product every six months or so, the robots couldn’t learn fast
Some things don’t change, though; remember the paperless office? In 1975 an
office worker consumed less than 100 pounds of paper per year. Now it is more
than 200 pounds. Paper not only won’t go away but we are using more of it. These
things don’t change because of the social context to information. This is eloquently
discussed in a brilliant book called “The Social Life of Information” by John Seely
Brown and Paul Duguid2, and is something else that we have to take into account
when considering this whole area - and when forecasting the end of paper,
organisations, careers, offices or whatever. (Brown and Duguid call this “endism”.)
So why bother with managing knowledge? Intuitively, in a knowledge society
managing knowledge must be the ultimate application. More concrete answers
come from the 2001 MAKE (Most Admired Knowledge Enterprises) report3:
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A 40% annual return on assets at A.T. Kearney, compared to average of 18%
return; annual productivity improvement 7-30% according to Gartner, a 14.1%
average RoI on knowledge initiatives at Ipsos-Reid and a 50% reduction in
knowledge worker turnover (Drake Beam Morin). Recruiting and training cost is
estimated at $150K per head.
Looking at knowledge loss in more detail, the annual avoidable cost for organisation
of 10,000 with a 15% attrition rate is $225 million! This makes you wonder about
downsizing, of course: Dispensing with your most valuable assets - even paying
them to go - seems a bit daft as a corporate strategy. It is estimated that GE lost a
couple of billion from it’s last round of downsizing.
There are many other measures in the literature for the value of knowledge,
including one from my colleague, Chris Yapp, who describes the cost of not
knowing, or CoNK, a corollary of Philip Crosbie’s “cost of non-conformance”4 from
the quality management literature. Whatever you say about the accuracy of any
measure of the value of knowledge, and of managing it properly, I think it is worth
bearing in mind Leif Edvinsson’s advice on the topic: 'being roughly right is better
than being precisely wrong".
And finally, if KM isn’t a much fought-over political football then you can be sure that
no one really believes in the value of knowledge, no matter what they say.
What is Knowledge?
So what is knowledge anyway? I don’t pretend to have the definitive answer, but we
can at least have a go at a simple definition involving the “general purpose
This can be used to describe most things,
for instance Operational systems, Tactical
systems and Strategic systems.
But in this case we’ll use the convention
that data in context becomes information,
and information in context becomes
knowledge. It has been said that
knowledge in context generates decisions,
but I won’t go that far.
Wisdom is something else, and is way
beyond the scope of this discussion. I’ll
leave the definition of wisdom to the
reader as an exercise. (This always
means that I don’t know the answer.)
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I’ve put the diagram below at this point
with some trepidation, because we
haven’t yet looked at what we mean by
knowledge in any detail. This is the
Gartner4 view of Knowledge
Management as opposed to Information
Management. It’s a good pointer to some of the additional, softer things that we will
need to consider.
We can be knowledgeable with
other men’s knowledge, but we
cannot be wise with other
men’s wisdom. Michel de Montaigne
So back to definitions. The definition from ‘The Concise Oxford Dictionary’ includes
such interesting meanings as “sexual intimacy”; hardly a lot of use in our search for
enlightenment. But let me assure you that definitions of knowledge are, in fact, the
last thing you need.
A cautionary tale
Elizabeth Lank, ICL’s first Director,
Mobilising Knowledge, used this
picture as part of her justification for
our intranet, CafeVIK, of which more
later. The idea was that there were
islands of knowledge that were
costing us a fortune in terms of
“reinventing the wheel”.
Elizabeth was asked to go see the IS
manager after her presentation. He
was very interested in what she had
to say, and in the difference between
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knowledge and information. When Elizabeth had finished he said that he was glad
to know the difference, because Information Management was his baby and so long
as she stuck to knowledge there would be no problems. As I said, if it matters it will
A footnote: Elizabeth was telling the story to a colleague. He said that the problem
wasn’t really the islands; it was the sharks circling in the water!
So don’t let’s worry too much about the definitions, but here is one that I like:
Knowledge is a fluid mix of framed expertise, values, contextual
information and expert insight that provides a framework for
evaluating and incorporating new experiences and information. It
originates from and is applied in the minds of knowers. In
organisations it often becomes embedded not only in documents or
repositories but also in organisational routines, processes, practices
Davenport & Prusak, 1998, Working Knowledge, HBP
This definition, from Davenport and Prusak, touches on many of the things that I
want to talk about, mainly things (like framed expertise and values) that you can’t
hold in a computer (or at least I don’t think you can), and the concept of knowledge
implying a knower. There is also the concept of context: As Aeschylus said: “Who
knows useful things, not many things, is wise.”
This definition also allows that knowledge can become embedded in organisations,
in their routines, processes, practices and norms. It has been said that individuals
don’t build oil refineries; organisations do. Whether what actually gets embedded is
knowledge, or knowledge assets, or knowledge objects is something to which we’ll
return in a later article.
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1. Davenport TH and Prusak L, 1998: Working Knowledge: Harvard Business School Press
2. Brown JS and Duguid P, 1999: The Social Life of Information; Harvard Business School
4. Crosby, Philip 1979: Quality Is Free: The Art of Making Quality Certain, McGraw-Hill
5. Caldwell French, 2000: Knowledge Management Scenario: The Enterprise and Beyond;
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Marketing Director, ICL Ireland, http://www.icl.ie/
John has worked in the IT industry for over 25 years. Currently
marketing director with ICL Ireland, he has worked as a
consultant, in sales, as a project manager and in technical
support. Immediately prior to his current appointment he was
responsible for business development in ICL's e-Innovation unit.
John was elected chairman of the Irish Internet Association in
January 2002. He was a member of the Learning Advisory
Group of the first Information Society Commission, chairman of
the E-Commerce Association of Ireland, a founding member of
Irish Computer Aided Design Association, a director of the Irish
Unix Users Group, director of the Irish Computer Society and
chairman of the OU MBA Alumni Association, as well as non-executive director of
Glockenspiel Ltd, which provided software development tools.
Awarded a BSc and MSc by the National University of Ireland, an MBA by the Open
University and a Master of IT by AIIM, he is a chartered engineer and a fellow of the Irish
Computer Society. His main research interest is managing knowledge.
In his spare time he goes fishing and gets lots of practical experience for his website
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